Rules Committee gets a grip on Credit Hire

Directions issued by Judges in relation to credit hire vary significantly, regardless of track allocation. This makes it difficult for compensators to know what tactics to adopt or when to commit to the additional costs of commissioning rates reports.

The timing of what steps should be taken, and when in credit hire cases, is often not set out in the most logical order in Court Directions. The Rules Committee has offered a solution. Draft model directions are open for comment in their consultation period which expires on 2 August 2017. Click here to view the document.

It is hoped that this model will fix a few frustrations for compensators. For example, where impecuniosity is pleaded, an additional raft of documents should be disclosed by the Claimant to prove his financial situation. At present, district judges will sometimes direct that these documents are disclosed with a witness statement after standard disclosure, or may provide specific directions in relation to disclosure of finances, or make no reference to impecuniosity at all. The length of time over which a Claimant has to prove his financial situation leading up to the hire period can also vary from 3 months to 12 months.

If the Claimant is not impecunious, a Defendant will want to produce evidence of the appropriate Basic Hire Rate which would have been available to the Claimant at the time of hiring - thus reducing the hire claim by as much as 30-50%. Often a Court Direction will require this evidence (in the form of a basic rates statement) before the Defendant has seen the financial evidence which would generate the need for the report in the first place. Defendants are therefore compelled to commission rates reports, many of which later prove to be unnecessary.

Our view of the model directions is that the Committee has got the right "ducks in line". Whist the exact timetable may need to be tweaked, depending on the case type and track, the steps and sanctions imposed are sensible and follow a logical order. This will help to narrow the issues, clarify what is needed (and when) and facilitate earlier settlement.

Whilst further directions could be added to deal with other satellite issues such as production of insurance certificates or hire agreements, the danger is that the "kitchen sink" approach taken in the drafting of Defences will be encouraged resulting in unhelpfully lengthy orders and a disproportionate time spent on what are mainly small claims cases. Standard disclosure should cover all the relevant issues raised in the Particulars of Claim and the Defence. If they are not, Defendants should be making specific disclosure applications and claiming costs.

Will this consultation is bring us one step closer to simplifying credit hire cases? If it does this will benefit claimants and compensators alike.